US Federal Government shared services-based payroll centres change pay schedules

The move is likely to affect employees’ Thrift Savings Plan (TSP) contributions, annual leave calculations and other benefits.

A number of US federal government shared services-based payroll centres are making small but significant changes to their 2018 pay schedules.

According to Federal News Radio, two of the largest payroll centres will operate using a slightly different calendar next year, which is likely to affect employees’ Thrift Savings Plan (TSP) contributions, annual leave calculations and other benefits.

The Agriculture Department’s National Finance Center (NFC), which provides payroll for about 650,000 federal employees will continue to start processing payroll on Thursdays and staff should receive their salaries either through a direct deposit or the post on Mondays. But they will be paid 27 times in 2018 compared to only 26 in 2017.

A customer notification sent out on 28 November by the NFC said: “The first business day after payroll processing weekend is the official payment date for direct deposit and payer check net salary payments. Generally, net salary payments are processed with Monday’s date. However, when a federal holiday falls on payroll Monday, these payments are processed with Tuesday’s date.”

This situation will take place three times during 2018 – on Tuesday 2 January (the day after New Year’s Day), Tuesday 16 January (Martin Luther King Day) and Tuesday 9 October (Columbus Day).

The Interior Business Center, which provides a range of HR services including payroll to more than 150 agencies, will also operate 27 pay periods next year, while the General Services Administration Office of the Chief Financial Officer Payroll Services Branch will administer 26.

The General Services Administration (GSA) Payroll Services Branch, which processes payroll for the GSA and client agency employees, and the Defense Finance and Accounting Service have yet to announce their intentions.

The payroll calendar is important as it guides TSP participants in how much they should set aside to receive a full matching contribution from their agencies at the end of each year.

Federal employees and TSP participants can choose how much of their income to contribute during a given, bi-weekly pay period. Participants in the FERS retirement plan also receive a matching contribution from their agencies on the first 5% of the sum they set aside during the pay period.